Aluko Lauds CBN over New Naira Policy http://www.thisdayonline.com/nview.php?id=87015
• MAN chairman calls for rethink
By Tokunbo Adedoja in Lagos and Ahmed ****tu in Ilorin, 08.22.2007
Foremost economist, Prof. Sam Aluko, has applauded the decision of the Central Bank of Nigeria (CBN) to shore up the value of the naira through redenomination commencing from August next year.
The Manufacturing Asso-ciation of Nigeria (MAN), however, called for a rethink of the policy.
Unfolded last week by CBN Governor, Prof. Chukwuma Soludo, the naira redenominaton policy has continued to elicit mixed reactions from Nigerians, raking in commendation here and condemnation there.
When the policy eventually takes off, N20 will be the highest denomination and exchange rate will be kept at N1.25 to the U.S. dollar.
Aluko, who reacted to the policy yesterday in Akure, Ondo State capital, through a telephone text message, said the policy was long overdue.
“I have been advocating for the fixing of our exchange rate system for a long time but the government has always preferred market rate,” he said.
According to him, the floating exchange rate system is responsible for the naira's current “sorry state”.
He said Nigeria's current level of development could not accommodate a floating exchange rate system, whereby the value of the naira would be determined by market forces.
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Fixing of an exchange rate for the naira has more advantages than disadvantages to the country’s economy,'' Aluko wrote in his text message.
Aluko said he would soon produce a comprehensive report and analysis on the fixing of the naira exchange system, stressing: “What I am saying now is just a tip of the iceberg.”
But the Chairman of Kwara State chapter of MAN, Mrs. Omolola Olobayo, said the naira redenomination policy would not help the masses but rather compound the nation’s economic woes.
She said it was high time the government provided an enabling environment that would allow the industrialists have access to loans to assist them establish cottage industries and thereby reducing unemployment rates in the nation.
Olobayo, who is the Executive Director Sales and Marketing, Doyin Group Companies, made the remark in Ilorin while speaking with newsmen on the state of the nation.
She called on the Federal Government to have a rethink on the policy so as to accelerate the socio economic development of the masses.
According to her, it is disheartening that poverty is on the increase in Nigeria on daily basis and therefore any policy that will not have any positive impact on the masses and leave them poorer should not be encouraged.
She asked, “What would happen to our income as individuals in this country? What will be the cost even on an average Nigerian? How will this reduce fraud? So many questions, to me, I believe the proposal will leave the economy worst than it met it.”